ORIENTAL YUHONG(SZ:002271) HTSC·2025-08-01 06:38Investment Rating - The report maintains a "Buy" rating for the company [7][5]. Core Views - The company reported a revenue of 13.569 billion RMB in 1H25, a year-on-year decrease of 10.84%, with a net profit attributable to shareholders of 564 million RMB, down 40.16% year-on-year [1][5]. - The decline in revenue is attributed to price pressures in the waterproofing segment, while new product categories and regions showed strong performance [2][5]. - The company is actively pursuing debt restructuring and asset protection through property acquisition, alongside ongoing overseas expansion efforts [4][5]. Summary by Sections Financial Performance - In 1H25, the company achieved revenues of 55.13 billion RMB from waterproofing materials, 39.46 billion RMB from coatings, 19.96 billion RMB from powder materials, and 11.38 billion RMB from other main businesses, with year-on-year changes of -8.84%, -17.11%, -6.24%, and +46.97% respectively [2][5]. - The gross profit margin for 1H25 was 25.4%, a decrease of 3.82 percentage points year-on-year, with specific margins of 22.60% for waterproofing materials, 36.54% for coatings, and 26.59% for powder materials [3][5]. - The company reported a net cash flow from operating activities of -396 million RMB in 1H25, an improvement of 930 million RMB year-on-year [3][5]. Debt and Asset Management - As of 1H25, the company had a debt restructuring book value of 840 million RMB and had transferred properties worth 2.34 billion RMB to secure asset safety [4][5]. - The company plans to distribute a cash dividend of 9.25 RMB per 10 shares, reflecting a commitment to shareholder returns [4][5]. Future Outlook - The revenue forecasts for 2025-2027 have been adjusted downwards by 4.9%, 5.4%, and 4.9% respectively, with net profit estimates reduced by 20.21%, 20.70%, and 17.31% [5][10]. - The target price has been revised to 13.80 RMB, corresponding to a 25x PE valuation for 2025 [5][8].